the challenge ahead february 22, 2007 presentation for zero-to-three fact finding trip

Center for Public Policy Priorities www.cppp.org

The Challenge AheadThe Challenge Ahead February 22, 2007

Presentation for Zero-to-Three Fact Finding Trip

Eva DeLuna Castro, Budget [email protected] (512) 320-0228 x 103


Outline

• Growing Needs/Needs of Zero to Three

• Current programs and levels of investment; likelihood of major changes in 80th Session

• Long-term Challenge: Tax Reform


Texas: A Young, Fast-Growing State• Texas has 6.4 million children, second only

to California (9.7 million).• Texas is almost tied with California in child

population growth from 2000 to 2005.Our child population grew by 417,000, vs. 428,000 for CA

• Texas child pop. grew 7% from 2000-05, behind GA (8.4%), NC (8.4%), FL (11%), AZ (14.7%), NV (20%).

• Children are 27.7% of the state’s residents. Only Alaska (28.4%) and Utah (30.1%) are younger.

• By 2040, school enrollment projected to double.


With High Needs• Almost one-fourth of Texas children live in

poverty (less than $17,170 for a family of 3)

• Another fourth live in homes that are economically disadvantaged

• Highest percentage of children without health insurance

• Limited English Proficiency students: 1996-97 = 514,139 (13.4%); 2006 = 711,237 (15.8%)

38% growth in the total, 18% growth in the rate


A Closer Look at Texans Ages 0-3: By Ethnicity and Income/Poverty, 2004-05

261,786

262,720

0

100,000

200,000

300,000

400,000

500,000

In Poverty 1 to 1.5 timesthe poverty

line

1.5 to 2 times 2 to 3 times More than 3times

Other

White

Black

Hispanic

52% of Texas’ 1.5 million Zero to 3-Year Olds are “Low Income” (Below 200% of Poverty)


8%

22%

23%25%

0

100,000

200,000

300,000

400,000

500,000

In poverty 1 to 2 timespoverty

2 to 3 timespoverty

More than 3times

Uninsured

Public program

Privately insured

Texans Ages 0-3: By Health Coverage and Income/Poverty, 2004-05

19% of Texas’ Zero to 3-Year Olds are uninsured. Medicaid/CHIP are covering most low-income kids; employer-sponsored or other private

coverage reaches most kids at higher income levels.


Texans Ages 0-3: By Family Type, 2004-05

Male-Headed,

57,509 , 4%

Female-Headed, 315,746 ,

21%

In a Husband-Wife Family, 1.1 million,

75%

56% of Children Up to Age 3 in Female-Headed Families Live In Poverty, Compared to 17% in Two-Parent or 29% in Male-Headed Families


4.4 4.7 5.0 4.9 5.1 5.2

18.6 19.420.6

22.723.9 24.2

0

10

20

30

1999 2000 2001 2002 2003 2004

Perc

en

tEnrollment Trends in Child Care

and Pre-Kindergarten

PreK: As % of 3 and 4 Year Olds

Child Care: As % of 0 to 12 Year Olds

In 2005, 46% of Texas children served by the federal child care block grant were under 4 years old. US Average: 40%.


0

50,000

100,000

150,000

200,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Pre-K, Early Education, and ECI Comprehensive Services

Pre-Kindergarten

ECI Services (for 0-2 Year Olds)

Early Education programs through school districts have seen no enrollment growth, but ECI and Pre-K have grown

Early Education


9,9

82

12

,98

3

11

,97

7

14

,91

4

14

,48

0

16

,10

6

16

,99

0

18

,47

3

22

,24

7

25

,02

7

13

,36

8

37%

30%

0

10,000

20,000

30,000

1996 1998 2000 2002 2004 2006

Vic

tim

s A

ge

3 o

r B

elo

w

0%

10%

20%

30%

40%

Pe

rce

nt

of

All V

icti

ms

Child Protection: Confirmed Victims of Abuse/Neglect

Zero-to-Three Age group is becoming a larger share of Texas’ children who are confirmed to be victims of abuse or neglect


1,9

99

1,6

96

2,0

16

2,3

95

2,6

22

2,8

93

3,1

10

3,4

67

4,1

61

4,4

04

1,8

30

22.1

15.5

0

2,500

5,000

1996 1998 2000 2002 2004 2006

Fo

ste

r C

hild

ren

Ag

e 2

or

Be

low

0

5

10

15

20

25

Pe

rce

nt

of

All

Fo

ste

r C

are

Child Protection: Foster Care

Zero-to-Three Age group also a larger part of Texas’ foster care caseload


Local only: 10th (7.3%)State only: 49th (6.7%)1% of Personal Income = $7 B

Texas Invests Less than Other StatesState and Local Own-Source Revenue as a Percent of Personal Income, 2004


Texas Spending Is Flat

13.3%14.3%

4.5% 4.2%

0%

4%

8%

12%

16%

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Pe

rce

nt

of

Gro

ss

Sta

te P

rod

uc

t

State/local own-source revenue as % of GSP

State own-source spending as % of GSP

Sources: U.S. Census Bureau; Comptroller of Public Accounts


What State Government Pays For

Source: U.S. Bureau of the Census, State Government Finances series. Data for 2004 for Texas, total expenditures (including trust) of $77.3 billion.

Education - 35%

Medicaid and public assistance -

24%Police &

Corrections4%

Other - 6%Gov.

Admin. - 2%

Debt Svc. - 1%

Health-2%

Hospitals - 4%

Highways - 8%

Insurance Trust

(Pensions, UI) - 13%Natural Res.

& Parks 1%

Cash Aid - 1%


What Local Government Pays For

Source: U.S. Bureau of the Census, Government Finances series. Data for 2004 for Texas, total expenditures (including trust) of $85.7 billion.

Education - 43%

Other - 7%

Debt Service - 6%Gov. Admin. - 4%

Utilities (Water, Electric, Gas) & Transit - 12%

Health - 2%

Hospitals - 6%

Streets & Hwys. 3%

Fire - 2%

Insurance Trust - 1%

Police & Corrections - 6%

Natural Resources & Parks 2%

Housing & Dev. - 2%

Sewers & Trash Disposal - 4%


How Can There be a “Surplus” in a Low-Spending State?

For 2006 and 2007, the Comptroller reports

$68.2 billion in general spending,

For 2008 and 2009, the Comptroller projects

$82.5 billion in general revenue

And $82.5 B revenue, 08-09 - 68.2 B spent, 06-07

$14.3 billion “surplus”


Remaining, $1.9 b, 13%

"Truth in Spending", $2.5 b, 17%

HHS, $3.7 b, 26%

Higher Ed., $1.7 b, 12%

Other K-12 , $0.6 b, 4%

2008-09 Tax Cuts, $3.9 b,

28%

What a “Current Services” Proposal Would Have Done with $14.3 Billion

(public employee pay/ health ins./pension; prisons; all other)

(would restore state parks funding; utility

discount; more)


Remaining: $2.5 b, 17%

Medicaid/CHIP Caseloads; Education, $2.1 b, 15%

Replace TIF & CPS Rainy Day Funds, $1.4 b,

10%Undo

Deferrals, $1.4 b, 10%

2010-11 Tax Cuts, $3 b,

21%

2008-09 Tax Cuts, $3.9b,

27%

What the Proposed State Budget Would Do with the $14.3 Billion

41% of revenue ($5.8 billion) would not increase

state spending


What Would the Proposed 2008-09 Budget Do for Basic Services?

•K-12: Cuts to Student Success Initiative ($31.8 million less); pre-K grants (-$18.4 m); Reading, Math & Science Initiatives (-$3.4 m); Master Teacher Grants (-$2.7 m)

•Cover caseload increases in Medicaid and CHIP, but not cost increases (need another $1.6 billion GR for that)

•Provide funds needed to keep Child Protective Services reform at 2006-07 levels, but not to further reduce caseloads, improve foster care/other provider rates, etc.

•Higher Ed: Texas Grants would reach only 47,852 students by 2009, a 22% drop from 61,067 in 2006


What Else Would the Proposed Budget for 2008-09 Do?

•Cut General Revenue Funding for community & other public two-year colleges and 43 state agencies (22 General Government & Regulatory, 5 Judiciary, 4 Public Safety/ Corrections; 7 Natural Resources; 5 Business/Economic Development)

•Not completely make up for loss of federal funds for child support enforcement

•Cut TANF cash assistance funding by 11 percent; caseloads drop 4 percent (to 131,820 by 2009)

•Cuts child care slots for “working poor” families from 104,439 in 2006 to 96,964 in 2009 (7% cut)


$0.5

$4.1 $4.2 $4.4 $4.7

$7.6$7.3

$6.9$6.6

$2.1

$0

$2

$4

$6

$8

$10

2007 2008 2009 2010 2011

Cost of property tax cut

Revenue from special session tax changes

Billions

Cost of Reducing School Property Taxes Compared to New Revenue

$5.2 billion gap $5.8 b gap


Sources: Comptroller of Public Accounts, Annual Property Tax Report; Cash Report.

From a Taxpayer’s Point of ViewMajor State & Local Taxes in Texas, 2006

Special District

5%

County 7%

School District28%

Other State Taxes21%

State 25%

City 7%

Local 7%

Sales Tax 32%

Property Tax 47%


Taxes, From the State’s Point of View

State Tax Collections, 2006(Total: $33.5 billion)

Gas/Oil Production

10%Other3%

Insurance4%

Franchise8%

Sin (Cigarette/Tobacco,

Alcohol)

4%

Sales54%

Motor Vehicle Sales and

Rental9%

Motor Fuels9%


All Revenue, From the State’s Point of ViewTexas State Government Revenue, 2006

(Total: $72 billion)

Licenses, Fees,

Permits, Fines,

Penalties8%

Interest/Investment

Income3%

Taxes46%

Lottery2%

Other6%

Federal Funds34%


State Government Sources of Nonfederal Revenue

32

38

39

39

7

6

5

11

11

3

7

4

6

7

6

6

8

7

6

5

3

3

4

6

4

4

4

9

13

13

11

14

8

6

7

6

4

3

3

4

6

4

7

0% 25% 50% 75% 100%

1986

1996

2006

2009

Sales tax Franchise tax Oil/gas

Vehicle sales Fuels taxes Tobacco/Alcohol

Other taxes Licenses/Fees Interest/land salesLottery Other Nontax


Indicators of Ability to Pay

Texas US Average Texas

rank

Per Capita Personal Income, 2005 $32,462 $34,586 27th

State and Local Taxes as a Percent of Personal Income, 2004

9.4% 10.4% 43rd

Sources: Bureau of Economic Analysis and the Census Bureau.


14.2%

8.2%7.0%

6.5%

5.1%

0%

3%

6%

9%

12%

15%

<$21,797 $21,797-39,743 $39,743-61,734 $61,734-96,693 >$96,693

Household Income

Per

cen

tag

e o

f H

ou

seh

old

In

com

e P

aid

in

Tax

es

Households with the Lowest Income Pay the Highest Percentage in State and Local Taxes


4%

9%

15%

22%

51%

8%12%

41%

23%

16%

0%

20%

40%

60%

<$21,797 $21,797 to39,743

$39,743 to61,734

$61,734 to96,693

Over $96,693

Household Income

Percent of total income Percent of total taxes

The Top One-Fifth of Texas Households Pays Less Than Its Fair Share of Taxes

the challenge ahead february 22, 2007 presentation for zero-to-three fact finding trip

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